Leviathan 2.0

(note: as of today [4/5/16] this essay is incomplete. I’m publishing it early so that I can get feedback in advance of my talk. I plan to flesh out many of these sections, possibly add a discussion of space colonies if I can hunt down any reasonably proposals, and write a conclusion.)

I’m preparing to give a talk to the Transhumanism Club of the University of Colorado in Boulder. Entitled “Leviathan 2.0”, it’s a quick treatment of some interesting attempts being made to bring much needed freshness into governance and statecraft.

I discuss a number of different vehicles for achieving this goal, all of which are in varying stages of planning and completeness. Because some of my information is out of date I have tried to indicate how recent my facts are and provide plenty of links for anyone wanting to explore further.

Background

For the purposes of this essay the terms “State”, “government”, and “sovereign” can be used more or less interchangeably. Nailing down what one means by these terms, however, is a somewhat more complicated matter.

To the early theoretical architects of communism the State was a centralizing mechanism meant to combat ‘anarchy in the means of production’ and ensure a more equitable distribution of goods and services in a society. The intellectual precursors to the Fascist movement of 19th and 20th century Europe trafficked in the concept of an “organic state” which viewed the individuals comprising a society as analogous to the limbs and tissues of a greater animal, without which they couldn’t survive. And then of course you have the sociologist Max Weber’s concise view of a government as a monopoly on force over a geographic area.

As we will be exploring one system that completely does away with the link between geography and government we’ll need a definition that is less restrictive. For us, a state is a recognized authority that claims for itself rights which it may or may not give to its citizens.

Charter Cities

Popularized by economist Paul Romer, charter cities are meant to be a kind of “special economic zone” (SEZ), but scaled up to at least 1,000 square kilometers, or about the size of a small city. Proponents argue that this is something of a sweet spot; it’s big enough to facilitate meaningful economic, social, and political change while still being small enough to be practicable.

A charter city would be established inside of an already-existing state, on undeveloped lands, and with a formal charter in place that specifies in advance what kinds of rules citizens will be expected to abide by.

But this charter’s rules can be quite different from the rules of the host state, and therein lies the magic. By creating a mechanism for entrepreneurs and interested parties to found new states, charter cities could do a lot to encourage experimentation with different kinds of institutions and policies. Various sovereigns would then have to compete with each other for a ‘customer base’ of citizens willing to live in, work in, and be taxed in their country. Few would contend that the world’s public sectors are hotbeds of innovation, and having to work to maintain willing customers like standard businesses do would incentivize these public sectors to respond better to what people want.

A favored example of a successful SEZ is Hong Kong. Beginning around 1950 its more attractive economic policy made it a popular target for people and firms willing to relocate from mainland China. Over the course of the past sixty years what began as a hot spot for button and trinket manufacturers became a world-renowned financial hub which scores well across a plethora of economic metrics like GDP, life expectancy, and wages.

Nor is it the only such example. Deng Xiaoping established a special economic zone around the Chinese city of Shenzen in 1980, and like Hong Kong it transformed into an economic powerhouse focused on logistics, manufacturing, and financial services.

The important thing about both of these examples is that they were designated places where citizens abided by a set of rules different from those enforced in the host country. For this reason charter cities, and the SEZS upon which they are based, amplify a dynamic that has long been in play: the world’s poor are not ignorant to the fact that there are better alternatives elsewhere, and many of those able to move somewhere else, do. Charter cities would simply speed up the proliferation of choices.

This is especially true for smaller countries. I live in Colorado, and moving to a charter city in Maine would still be a major undertaking because America is geographically large. But in a fairly small country a charter city would likely be in reach of anyone, regardless of where it was located in the country.

All of this will be increasingly relevant to the world our grandchildren will live in, which is projected to have as many as 7 billion people living in urban centers by centuries end. How confident should we be that today’s governments will adequately meet the challenge of building the infrastructure required to support this influx? Must we accept that the sun will rise on the first day of the year 2100 over billions and billions of people accreting in slums around cities that simply cannot accommodate them?

Perhaps not. Charter cities could be a way of beginning to address this problem. So could their cousins, private cities.

Private Cities

A private city is distinguished from a charter city by the fact that it simply has no public sector. A private entity like Google owns the city outright, and either performs all the traditional functions that a state performs or lets other private firms handle it.

But like a charter city, with its intact public sector, a private city would have to compete to keep a tax base and would thus have incentive to respond to the demands of its citizens efficiently and effectively.

To elaborate further on this theoretical justification, private cities offer a way of “internalizing externalities“. Economists define externalities as being consequences, either positive or negative, which affect otherwise uninvolved third parties. If I produce great computers I can capture a huge amount of the value I create in the form of profits because anyone who wants one of my computer’s has to pay me for it. But if I spend a billion dollars on an air purifier capable of cleaning up the smog over LA, how am I suppose to get that value back? It’s not as though I can make people rent air from me.

For this reason ‘public goods‘ like clean air tend to be underproduced by private firms and produced inefficiently by the public sector. Both private cities and charter cities offer a potential means of efficiently producing greater quantities of such goods because they create an opportunity for firms to make a profit providing them.

But beyond this private cities might also help sole the even harder problem of incentivizing institutional change. In order to be competitive a private city will need to secure as much autonomy as possible from the government of its host country. With greater freedom comes a greater ability to experiment with novel institutions and forms of governance, allowing private cities to more quickly discover the configuration its citizens consider optimal.

While promising in the abstract, so far private cities have failed to rise to their potential. Lavasa, for example, is an Indian city being planned by Lavasa Corp, a private company. As of 2014, however, it looks as though its regulatory system will do little to encourage new businesses to set up shop there, which will likely prove disadvantageous in the long run.

Another private city in the works is nestled in Lagos, Nigeria. Eko Atlantic would have traditionally public sector services like security and energy provided by South Energyx Nigeria Ltd., the company building the city on land reclaimed from the Atlantic Ocean. But like Lavasa, it appears as though Eko Atlantic won’t make the process of starting a business more streamlined than it is in the rest of Nigeria. The developers of both Lavasa and Eko Atlantic fail to understand what made Hong Kong such a success story.

This is less the case for “the world’s first publicly traded city“, located in Saudi Arabia. Its CEO Fahd Al-Rasheed makes it clear that the King Abdullah Economic City is meant to increase economic diversity by building a huge manufacturing and industrial center in the ‘Red Sea Region’ between Africa and The Middle East. The KAEC, as well as the other ‘economic cities’ being planned in Saudi Arabia will be built with regulatory structures meant to foster investment and competition.

Seasteading

Both charter cities and private cities are promising ways of playing with the rules of social organization, but neither attempt to utilize the vast territorial resource which blankets almost 3/4s of the Earth’s surface: the oceans.

In terms of their theoretical justifications and end goals seasteads aren’t any different from private cities or charter cities, but unlike the latter, seasteads have more historical precedent. Cruise ships, house boats, and oil rigs demonstrate the feasibility of maintaining small populations on a semi-permanent basis in relative safety and comfort.

Patri Friedman, The leading proponent of seasteads, favors an incremental approach to testing the seastead concept. Rather than trying to get a few thousand people to relocate to the open ocean, start by tackling the engineering and legal problems of building a tiny floating village in calmer coastal waters. With this proof of concept in hand, it should be possible to attract more participants and investors. Larger seasteads will be able to specialize in providing services like water purification and aquatic research, to say nothing of the potentials for medical and traditional tourism.

As of April 2014 The Seasteading Institute has a design in place and is in talks with an undisclosed host nation to build in their waters.

When contemplating seasteads a number of potential dangers suggest themselves: piracy; tsunamis and rogue waves; high winds; the corrosive properties of salt water; and also piracy. While some of the members of this list are indeed formidable barriers, seasteading advocates maintain that the biggest obstacle to overcome is actually the labyrinthine state of maritime law, together with the possibility of a powerful sovereign like The United States intervening if it doesn’t like what the occupants of a seastead are doing.

Piracy, as it turns out, is a little like airplane crashes. When it happens gets a lot of media coverage, but the reality is that attempts to hijack cargoes and crew are usually unsuccessful, and piracy in general simply isn’t that big of a problem.

Polystate

By exploring the concept of a polystate we move from the merely theoretical to the wildly speculative; even Zack Wienersmith, the author of the book from which the concept’s name is taken, calls it “political science fiction”.

The distinguishing feature of a Polystate is that it completely severs the connection between geography and sovereignty, hence why my definition of a State contains no mention of geographic areas.

Properly grappling with this idea requires making the following distinctions: let a ‘geostate’ be a traditional government bound to a certain span of territory, an ‘anthrostate’ be a state with a distributed citizenry and no geographic ties, and a polystate be the tapestry of interwoven anthrostates.

To make this clearer, imagine that each country in Western Europe consists of some land with its state floating above it like a Zeppelin tethered to the Earth. If these countries decide to become part of a polystate their borders cease to be meaningful and the floating states smear out to cover all of Europe simultaneously.

People located in former Germany can subscribe to the German government if they choose, or to the French, Italian, or British governments. People located in the former Portugal or the former Great Britain have these same options as well. This means that neighbors living feet apart might be governed by different states with competing — and possibly conflicting — sets of rules.

Mimicking Wienersmith’s own example, let’s assume this new polystate has the following macro-rules: 1) no anthrostate may become a geostate, 2) each individual selects their government on their birthday, 3) if an anthrostate violates rule 1) it’s sovereign status is revoked and its citizens give a full day to choose a new state.

By now your head must surely be swimming with objections and questions. I will only relay a handful of Wienersmith’s answers; anything more substantive wouldn’t be worth writing, as Wienersmith’s own book is short, well-written, and available in an inexpensive Kindle format.

What happens when a member of one anthrostate commits a crime against a member of another anthrostate? This sometimes happens with geostates, as in cases where citizens of one country commit crimes while abroad.

There are a handful of potential solutions. Anthrostates could work together to have compatible legal systems in order to streamline interstate judiciary proceedings, or they could defer to an agreed upon third party arbiter.

But this probably wouldn’t work in cases of radical incompatibility, such as if a dictatorship overlapped with an extremely liberal democracy. For the sake of argument let’s stipulate that the dictator has decreed that his citizens will face no retribution for attacking citizens of the liberal democracy, and he will defend them in court if need be.

Here, there may simply be no alternative to anthrostates going to war, which seems to be essentially the same dynamic at play between modern geostates. But war in a polystate would be a very different affair, in part because it is never clear who holds what territory and who belongs to what faction.

Wienersmith speculates that anthrostates might make war by fight in a predetermined area, by fighting on a house-by-house basis while taking care not to harm non-combatants, by fighting on a house-by-house basis while taking no care not to harm non-combatants, or by first evacuating non-combatants and then fighting in a conventional style.

What if one anthrostate consists of nudists and another of staunch Catholics? It’s possible in such a scenario that technology will provide solutions. The futuristic version of Google Glass, distributed to all citizens in the Catholic anthrostate, could be used to pixelate the unmentionables of any disrobed nudists.

To his credit Wienersmith admits that a lot of these replies are very speculative and hand-wavy. He knows he isn’t an economist, and his goal with the book is to explore an interesting take on the problem of governance, not to win any arguments.

Still, there are a few reasons why I don’t think polystates would be meta-stable. The first is simply that any sufficiently powerful geostate could decide that a disunified polystate is ripe for invasion and takeover. Even leaving this possibility aside Adam Gurri notes that even a slight preference for being around like-minded people could result in enough geographic clustering for anthrostates to wind down into geostates. And while traditional geostates don’t seem to have developed a good solution to the problem of externalities, I can’t see any reason polystates would fare better.